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GOVERNMENT of ANDHRA PRADESH
FINANCE DEPARTMENT
Previous Budget Speeches

FINANCE MINISTER'S BUDGET SPEECH 2004-05

 
GOVERNMENT OF ANDHRA PRADESH

BUDGET SPEECH
2004 - 05


K. ROSAIAH,
MINISTER FOR FINANCE

SPEECH OF SRI K. ROSAIAH
HONOURABLE FINANCE MINISTER WHILE
PRESENTING THE BUDGET FOR THE YEAR
2004-05 TO THE ANDHRA PRADESH LEGISLATIVE ASSEMBLY
ON 23rd JUNE 2004.
 
 

Honourable Speaker Sir and Honourable Members,


1. I rise to present the Budget of the Government of Andhra Pradesh for the year 2004-05.

2. I extend my good wishes to the Honourable Members of this august House. Hon'ble Members will recall that this august House passed the Appropriation (Vote on Account) Bill for the period upto 31st July 2004, replacing the Ordinance got issued by the previous Government, about 18 days back and a full Budget is being presented today for the year 2004-05. This is the first Budget of the present Government, which has received a massive mandate in the elections held in the month of April 2004. The mandate, cutting across the three regions and different sections of the society, has placed upon our shoulders a great responsibility of rebuilding the State and putting the economy back on the rails.

3. Hon'ble Members are aware that in the Governor's address, the Government had clearly indicated its development strategy and economic priorities. To mention a few; special emphasis on Agriculture sector aiming to achieve an annual agriculture growth of 6% in real terms, improving farm productivity, development of rain shadow areas, ensuring minimum support price to all the farm produce, completion of ongoing major irrigation projects within five years, electrification of all habitations in rural areas within three years, economic development of members of DWCRA groups, implementation of rural housing programme and Universal Health Scheme, achievement of better growth rate in literacy and revival of industrial activity are some of the important priorities of this Government.

4. Budget formulation has always been an extremely difficult and delicate balancing task. This task has become more difficult and complex in the situation we have inherited. The plethora of unproductive and unviable schemes and programmes of the previous government, rather high level of debt stock and consequent burden of debt servicing, three consecutive drought years which have severely affected the farming incomes are some of the major constraints inherited by this Government. However, these constraints will not deter us in translating promises made to the people into actions and in implementing pro-poor and people-friendly policies in the interest of the State with particular reference to the development of backward areas. Hon'ble Members are all aware that free power to farmers has already become a reality.

5. The few days we have been in the Office, our efforts have been to analyse the constraints and to adopt steps for resolving issues relating to major areas of concern. Though the time is not sufficient to tackle all the problems immediately, sufficient care and caution has been taken to ensure that various announcements made by this Government are backed by suitable financial support by reorienting the priorities and containing unproductive expenditure.

6. I am aware of great responsibility and confidence bestowed upon the Government in restoring the fiscal health of the State to its glory, which I know, is a very arduous task. It is essential that fiscal discipline and prudence be observed by each one of us to make use of the limited and precious resources towards the development and welfare of the people of the State. We have been observing that the scarce public resources have been utilised in many unproductive schemes, which have not benefited the rural, needy and the poor. We have to now modify the expenditures in favour of developmental and infrastructure spending on one hand and development of human resources on the other. Conscious efforts are required to contain the non-plan expenditure during this year within the constraints of ever growing establishment expenditures, debt servicing and committed subsidies. As a first step, we have tried to maintain the non-salary Budget ceilings under non-plan unchanged for most departments without giving any growth, so that the departments adopt austerity measures to avoid unproductive expenditures. Hon'ble Members are well aware that augmentation of revenues of the State is equally important for us to maintain the optimum levels of expenditures in the priority areas. We do not intend to burden the people of the State with further tax liability but we intend to mobilise revenues with special focus on revenue buoyancy, improving the administration and efficiency of the tax system and plugging the loopholes in the system to improve the tax compliance. We are also awaiting the final report of the Revenue Reforms Committee headed by Dr. E.A.S. Sarma to take up further tax reforms to enlarge the base of the revenues of the State.

7. We would also like to address the key issues of greater financial accountability at all levels. Transparency in Budget formulation and execution, simplified accounting and monitoring will be the other areas of our further concentration. I also recognise the need for having effective internal control systems to put in place to have overall control and accountability. There is also a need to strengthen internal and external audit and improving the scrutiny of audit reports at the appropriate levels. State and District level Audit Review Committees will be revitalised to ensure better audit compliance. Simplified procedures for accounting and audit for local bodies will also be further strengthened. I believe that ensuring access to information on public finances would certainly enable the people to supplement the scrutiny of the Legislature on the various aspects of financial management. Further, I also want to make it clear to the august House that we understand the implication of reforms in its true perspective and we would welcome all the investments, programmes and reform processes which are mainly intended for the upliftment of the poor and common man in the State without compromising on our sovereignty and dignity.

8. Inspite of paucity of time, we made special efforts in consulting the departments, in understanding their needs and activities to translate them into budgetary process in a very short time. We have tried our best to bring out the priorities of the Government as our top agenda and to accord adequate budgetary resources for the same with special focus on Irrigation, Agriculture, Infrastructure, Employment Generation, Health, Education and Poverty alleviation.

 
Review of State Economy
 
9. Hon'ble Members are aware that it has been the practice in the past, to bring out White Paper on State finances whenever a new Government is formed. However, due to time constraint and the Budget Session being very near, we thought it more appropriate to share the facts on State finances during my Budget speech.

10. While India itself was at the bottom of both economic and human development index in the comity of Nations in 1947, the situation in respect of Andhra Pradesh, which was formed in 1956, by combining the less developed areas of the former States of Madras and Hyderabad, was even worse, especially because in the Telangana Region, the level of economic and social development was lower not only in comparison with other parts of the former state of Hyderabad but also in comparison with any other region in the country. In 1956, Andhra Pradesh was behind the all India averages in respect of many parameters like per capital income, economic growth, human development, per capita power consumption, farm yields, literacy rates, population growth rates, per capita motor vehicles, number of villages electrified, life expectancy etc. The successive Congress Governments have played very significant role in building a modern, vibrant and dynamic economy for the state of Andhra Pradesh, ensuring growth with social justice in line with the broad economic policies pursued by the successive Congress Governments at the Centre. In the first three decades, the then Governments implemented many large irrigation projects. From less than 100 MW capacity in 1956, by 1990, the power generation capacity was taken to 4550 MW, considerable part of which is being used by agriculture in upland areas, thereby bringing vast tracts of land into irrigation. Hundred percent of Revenue villages have been electrified, as against a meagre less than 200 in 1951. With the above initiatives and by taking up agricultural extension work actively, the State could improve the productivity of rice from 1137 Kgs. per hectare in 1955 to 2,498 Kgs. per hectare by 1995, thereby improving the farm viability levels.

11. The successive governments have also brought in many large Public Sector Units and these projects together with their ancillaries have provided employment to lakhs of work force in the State, generating revenues to the State Government. During the first three decades, many prestigious R& D laboratories were set up in Andhra Pradesh and this has positively helped the State to emerge as one of the important knowledge hubs in the country. Credit should be given to successive Governments for having, as a matter of deliberate strategy, promoted local industrial entrepreneurial base, as a result of which by early 1990s, we have emerged as the bulk drug and pharma capital of India.

12. Andhra Pradesh has been among the first States in the country to take up social empowerment of Backward Classes, way back in early 1970s, although there was no such Constitutional obligation, by providing reservations for Backward Classes in education, employment and local bodies. Andhra Pradesh Backward Classes Finance Corporation was established for extending financial support to the youth belonging to backward classes. The State has also promoted Scheduled Castes and Scheduled Tribes Finance Corporations and LIDCAP, exclusively to help the Scheduled Castes and Scheduled Tribes. In respect of Minorities, a separate department was set up during the year 1993.

13. Thanks to all the above initiatives and despite the initial handicaps and disadvantages, Andhra Pradesh caught up with the other major states in terms of economic and social indicators and for the period 1980-90, the economic growth rate of Andhra Pradesh was indeed higher than the national average. In terms of human development index, Andhra Pradesh stood at ninth rank. During the period 1975-85, the growth in demand for HT connections grew at 12.5% per annum, indicating a very high level of industrial investment and growth. Due to prudent financial management, the revenue expenditure was always under control, so much so that at the end of 38 years period (1956-1994), despite having raised Rs. 58,285.72 crores as tax revenues for the entire 38 years period, the state had a cumulative revenue surplus of Rs.128.44 crores as on 31st March 1994. About Rs. 16,175.92 crores were raised as loans in 1958-1994 and the resources were mostly utilised for asset creation and with the result, the asset-liability ratio was 1.01:1.00 in 1994.

14. The previous Government, when it took the reins of the State for the second time in 1994, has had the good fortune of inheriting one of the fast growing economies, with a net revenue surplus, a positive asset-liability ratio and a State with a large industrial and scientific research base, besides a very well diversified local entrepreneurial base. We are among the few States in the country to be endowed with large reserves of Natural Gas and Coal, the cheapest sources for power generation.

15. Embarking upon highly lopsided and fanciful policies, the past government has led the State into a State of high level of indebtedness in less than nine years. Despite registering a very high growth rate in tax revenues, and having raised Rs. 1,65,911.50 crores as tax revenues, the State still suffered huge cumulative revenue deficit of Rs.21,720.92 crores for the period, and with the result, a large part of the borrowings of the State Government, essentially meant for creating new assets has gone into meeting the revenue deficit. No wonder, despite borrowings going up to the tune of Rs.57,588 crores, no major new assets have been created in the last nine years. The fact that the Government spent only Rs.22,276.44 crores on capital expenditure bears ample testimony to the mounting unproductive expenditure of the State Government during the last ten years.

16. From 1995, no new major industrial project has come into the State, nor did the government complete any new major irrigation project. On the other hand, many large and medium industrial projects in the State were closed down, causing loss of employment to lakhs of industrial workers. The average annual growth in employment in the State for the period 1994-2000 had fallen to 1.1% from what was 2.4% for the period 1983-94. Similarly, the average annual growth rate in employment in the State for women had drastically fallen to 0.3% for the period 1994-2000 from what was 2.7% for the period 1983-94. 17. Andhra Pradesh slipped from Ninth position to Tenth position in terms of Human Development Index (HDI) in 2001. The Asset-Liability Ratio of the State fell from 1.01:1 in 1995 to 0.63:1 for the year 2002-03. The asset-liability ratio calculated exclusively for the last ten years period alone would further bring down this ratio, signifying that a State, which was Solvent in 1994, is no more so, considering the report of CAG.

18. Whereas, the GSDP growth rate of the State for the period 1980-91 was higher than the national average GDP growth rate of 5.68% for the same period at constant prices, the same has for the period between 1995-2002, not only come down to 5.55% but is lower than the National Average GDP growth rate of 6.13% for the same period. GSDP growth rate of the state for the year 2002-03 has further fallen to 2.43% as against the National Average of 4%, signifying that the economic growth of the State had taken a severe beating during the last ten years.

19. While APSRTC and APSEB, the largest public utility organizations in the State, were earning profits during the period 1990-95, the same have been strangely suffering huge losses during the last nine years, despite regular tariff hikes. The farm productivity levels in Andhra Pradesh in respect of important crops like Rice and Sugarcane have remained stagnant over a decade and are far lower than that of neighbouring states like Tamilnadu. Whereas, the GSDP of the State rose from Rs.61,114 crores in 1994-95 to Rs. 92,755 crores in 2002-03, the agricultural GSDP fell from Rs.13,305 crores to Rs.12,000 crores at Constant Prices, clearly bringing home the point that the already low incomes of people engaged in agriculture had further fallen during the period of previous Government.

20. So, when I take a pause and look back, I feel sad that I have inherited a completely debt trapped state, with adverse asset-liability ratio, lower GSDP growth rate compared to the National Average, eroded Human Development Index and a State with an annual agricultural growth rate of 1.14% for the last ten years period as against what was 3.19% for the preceding decade. Not even the prestigious Telugu Ganga Project was completed. Nevertheless, I draw courage and inspiration from the fact that the Governments that took over the reins of the State in 1956 under more difficult circumstances, could still manage to build a vibrant and dynamic economy for the whole country. All that we need is right strategies and sincerity in implementation of those strategies.
 
Plan Outlay
 
21. We have programmed for an annual plan outlay of Rs. 13,291.20 crores during the year 2004-05, which is an increase of 21.15% over the last year's plan out lay of Rs. 10,970.46 crores. However, the total budgeted plan including Centrally Sponsored Schemes is estimated at Rs. 15,207.87 crores in 2004-05 as against the previous year's corresponding plan of Rs. 13,175.56 crores.

22. A Budget allocation of Rs. 933.19 crores under plan is made for Agriculture and allied sectors in 2004-05 against a provision of Rs. 655.60 crores in 2003-04 reflecting an increase of 42.34%. The total plan allocation for Irrigation is pegged at Rs. 4,245.72 crores in 2004-05 as against last year's allocation of 2,178.92 crores. This is a sharp increase of 94.85% over the previous year's allocation, reflecting our Government's commitment towards speedier completion of pending irrigation projects. The total plan allocation for Housing is Rs. 417.00 crores in 2004-05 as against last year's provision of Rs. 255.17 crores reflecting a growth of 63.42%. A total plan allocation of Rs. 1,197.64 crores has been provided in 2004-05 for the welfare of Scheduled Castes, Scheduled Tribes, Backward Classes and Minorities, which is an increase of 10.61% over the last year's plan provision of Rs. 1,082.75 crores. Under the Energy sector a plan provision of Rs. 2,254.63 crores has been made in this year's Budget as against previous year's provision of Rs. 2,058.86 crores giving an increase of 9.51%.

23. I shall now narrate some of the sectoral allocations made in the Budget:
 
Agriculture & Allied Services
 
24. Agriculture and allied activities constitute the bulk of economic activity of the State. Consequently, a higher growth in agriculture would have more favourable impact on the over all economic growth of the State and a lower growth in agriculture would substantially inhibit the same. The State registered a higher annual GSDP growth rate than that of the national average for the decade 1980-91, because agriculture grew at an average rate of 4.2% per annum for that decade. But when agriculture growth rate fell below 2% for the period 1994-2004, the GSDP growth rate of the State fell to 5% for the same period which is lower than the national average of 5.9%.

25. Inadequate extension work by the previous government has led to stagnated farm productivity levels leading to eroded incomes. Dwindling institutional credit and higher interest rates have added to the woes of the farmers. Sixty two percent of the work force of the State employed in Agriculture had to contend with 24.62% of the income of the State even in the year 1993-94, when agriculture was doing fairly well. Whereas the share of the Agriculture to GDP for the whole country fell from 27% in 1993-94 to 24% in the year 2002-03, the share of agriculture in GSDP of our State has fallen from 24.62% in 1993-94 to 13.13% in the year 2002-03, clearly bringing home the reality of the level of impoverishment of the people dependent on agriculture over the last ten years, which is why there have been unprecedented number of suicides in our State. The farmers in our State are truly in distress and need a healing touch immediately. It is precisely keeping this in mind and also the fact that the dependence on electrical pump sets in our state being the highest in the country, pushing up the cost of farming, as a first step to extend helping hand to them, the Government signed the first file ordering supply of free power to the farmers in the State besides waiving the old dues.

26. Our Government has also announced a special package to rescue the families of the farmers who have committed suicide due to crop failures or debt trap. Help lines have been established in all the districts to advice and help. I must confess that these are only temporary measures but I assure the august House that we are looking at a long-term strategy to over-come their economic problems.

27. Agriculture Technology Mission (ATM) will be set up immediately to focus on improving efficiency factors in farming through Precision Farming Techniques, to leverage IT to deliver real time information and customised knowledge to improve farmers' decision making and to come up with a model to develop a vibrant storage, food processing and packaging facilities for providing value addition to various horticultural products.

28. Rainfall received during 2003-04 was only 908 mm as against the normal rainfall of 922 mm (-2%). The State, as a whole, suffered severe drought for the last three years. Four hundred and fifty three mandals, which received deficit rainfall, were declared as drought affected during 2003-04. During 2003-04 the crop coverage was 75.23 lakh hectares as against a normal area of 81.41 lakh hectares during Khariff season. In Rabi season the coverage was 37.39 lakh hectares as against 37.33 lakh hectares. For 2004-05, the season has started with good monsoon having received widespread rains during the month of May 2004, which facilitated preparatory cultivation in almost all the districts. Anticipating a normal season, it is planned to cover 82.71 lakh hectares under different crops during Khariff, 2004.

29. During 2004-05 it is programmed to supply 15.85 lakh quintals of quality seeds, 23.38 lakh metric tonnes of Fertilizers, 2,900 metric tonnes of PP Chemicals.

30. Keeping in view the Hon'ble Chief Minister's emphasis on the development of Rain-Shadow areas on priority basis, a new department namely "Rain-Shadow Area Development Department" has been established, essentially with a view to give boost to rural employment and bringing into productive use of 7.28 lakh hectares of cultivable waste land available in the State. Cultivation of energy crops such as Jatropha Plantation will be encouraged for production of bio-diesel, which is declared by the Planning Commission of India as the major growth area.

31.Credit forms an important component of agricultural activity. It is programmed to provide Rs. 11,204.85 crores under crop loans and Rs. 1,814.75 crores under agriculture term loans. A provision of Rs. 65 crores has been made during 2004-05 towards interest subsidy for cooperative agricultural loans.

32. For the programmes of Food Grains and Minimum Support Price (MSP) operations cash credit limit (CCL) of Rs. 438 crores has been obtained from Reserve Bank of India by the Department of Civil Supplies.
 
HORTICULTURE
 
33. An extent of 1.20 lakh hectares of area is covered under Horticulture crops in our State. Recognizing the important role of Horticulture, we are committed to improve this sector and accordingly additional allocation has been proposed for the development of Horticulture during 2004-05. Andhra Pradesh Micro Irrigation Project will be implemented with greater vigour and thrust. Further, emphasis will be given for post harvest management to reduce the post harvest losses on fruits and vegetables.

34. The total Budget allocation for the year 2004-05 for Horticulture is estimated to be Rs. 316.25 crores against Rs. 160.98 crores budgeted last year.
 
SERICULTURE
 
35. Sericulture is a sustainable farm-based economic enterprise positively favouring the rural poor. At present an extent of 1.43 lakh acres of mulberry is under cultivation in our State. During 2004-05 it is planned to develop Bivoltine sericulture through Nucleus village concept by providing subsidies for creation of associated facilities such as rearing sheds, equipment, drip irrigation etc. During 2004-05 it is targeted to produce 54,000 metric tonnes of Cocoon production and 218 lakh nos. of Tasar Cocoons.

36. The total Budget allocation for the year 2004-05 for Sericulture is estimated to be Rs. 54.59 crores against Rs. 51.44 crores budgeted last year.
 
ANIMAL HUSBANDRY & FISHERIES
 
37. Livestock plays a very important role in rural economy. During 2004-05, it is programmed to cover 32 lakh breedable cattle and buffaloes with artificial insemination and cultivate green fodder in about ten lakh acres. Animal Husbandry Department will also cover hundred percent village poultry with Ranikhet Disease vaccination. Proposals are also under consideration to establish mobile veterinary clinics so as to provide livestock health cover in backward and remote agency areas.

38. The total Budget allocation for the year 2004-05 for Animal Husbandry is estimated to be Rs. 197.21 crores against Rs. 160.71 crores budgeted last year.

39. The contribution of Fisheries Sector to the GSDP is 2.86%. In order to exploit the potential in fisheries sector, Government have taken a decision to extend lease of in-land water bodies from 3 years to 5 years. It has been decided to appoint a Committee for suggesting steps to be taken in order to protect aqua farmers from Shrimp price fluctuations in the international market. An amount of Rs. 1 Crore is earmarked for the post harvest fisheries project with 100% assistance from Government of India.

40. The total Budget allocation for the year 2004-05 for Fisheries is estimated to be Rs. 24.77 crores.
 
MARKETING
 
41. The Department of Marketing will implement an action plan for Rs. 295 Crores during 2004-05 for the development of Market Infrastructure and Farmer Welfare programmes. Rythu Bandhu Pathakam will be implemented on a larger scale so as to protect the farmers from falling prices of agriculture produce.

42. The total Budget allocation for the year 2004-05 for Marketing sector is estimated to be Rs. 4.70 crores against Rs. 4.53 crores budgeted last year.
 
Irrigation & Flood Control
 
43. Andhra Pradesh being basically an agricultural state, highest priority has been given by our Government for development of irrigation infrastructure, focusing the new investment in backward and drought prone areas of the State. Government has drawn up a strategy to complete the ongoing and pending projects in a time bound manner within five years.

44. Farmers of the State have been suffering due to continuous droughts and very poor inflows into the reservoirs especially in Krishna Basin. To mitigate this suffering a long-term plan of action on drought proofing is necessary. Government has plans to take up projects in Godavari basin to put to use the large volume of 3000 TMC of Godavari water flowing into the sea and going untapped. Further, it is also decided to go in for large-scale use of drip irrigation/sprinkler irrigation for effective utilization of available water. Government is committed for completion of twenty-six ongoing and pending Major and Medium Irrigation Projects in a time bound programme as follows:

45. Eight projects viz., Vamsadhara Stage-II, Tadipudi Lift Irrigation Scheme, Pushkaram Lift Irrigation Scheme, Somasila Project, Telugu Ganga Project, Godavari Lift Irrigation Scheme, Ali Sagar Lift Irrigation Scheme, and Gutpa Lift Irrigation Schemes are programmed for completion in the next two years.

46. The balance eighteen projects viz., Thotapalli barrage, Janjhavathi, Pulichintala Project, Gundlakamma Project, Ramatheertham Balancing Reservoir, Guru Raghavendra Lift Irrigation Scheme, K.C. Canal Modernization, Galeru Nagari Sujala Sravanthi Project, Penna Ahobilam Balancing Reservoir Project-II, Handri Niva Sujala Sravanthi Project, Chitravathi Balancing Reservoir, Srisailam Left Bank Canal, Sri Ram Sagar Stage-II, Flood Flow Canal from SRSP, Bhima Lift Irrigation Scheme, Kalwakurthi Lift Irrigation Scheme, Veligonda Project and Nettampadu Lift Irrigation Scheme are programmed to be completed in the next five years. It is also programmed to take up four gigantic projects viz., Polavaram Project, Dummugudem Project, Yellampally Project and Ichampally Project on River Godavari at the earliest by earnestly obtaining all the necessary clearances.

47. All the above twenty six Irrigation projects are planned to be completed within a five-year time bound programme by utilizing financial assistance from World Bank, Government of India under AIBP, through Banks and by raising irrigation bonds in addition to normal plan Budget allocation. Discussions with Financial Institutions are going-on and the government is committed to achieve the goals set for completing these Projects. The Inter-State problems pertaining to certain projects like Lendi, Janjhavathi, Vamsadhara Stage-II, and Bahuda etc. are being gradually sorted out and agreement on Lendi with Government of Maharashtra has already been entered into.

48. During 2004-05, it is programmed to create an irrigation potential of about 7.101 lakh acres besides stabilizing 1.740 lakh acres.

49. The total Budget allocation for the year 2004-05 for Irrigation sector is estimated to be Rs. 6,053.19 crores against Rs. 3,973.46 crores budgeted last year.
 
POWER
 
50. Power is most important infrastructure for the economic development of the State and we have given top priority to this sector. As promised, we have provided an additional subsidy of Rs. 437.59 crores for supply of free power to farmers. The outstanding arrears of agricultural consumers to a tune of Rs. 1,244.40 crores have also been waived as a relief to them.

51. Capacity addition during 2004-05 is expected to be 386.25 MW with the commissioning of 280 MW of Konaseema Power Project and 106.25 MW share from NTPC Talcher. During this year, it is programmed to commission four 400 KV sub-stations, eight 220 KV Sub-stations, thirty-three 132 KV Sub-stations, two hundred and ten 33 KV Sub-stations and electrify 7,153 habitations. The Transmission & Distribution losses, which were 23.83% at the end of March 2004, are proposed to be reduced to 20.47% by March 2005.

52. The projected capital expenditure on transmission and distribution sector as per Tariff Order would be Rs 1,390 crores against Rs. 1,059 crores last year.

53. APGENCO has taken up execution of Rayalaseema Thermal Power Project Stage-II with a capacity of 420 MW at an estimated cost of Rs. 1,640 crores, Priyadarshini Jurala Hydro Electric Project, a joint project with Government of Karnataka with a capacity of 234 MW (AP's Share 117 MW) at an estimated cost of Rs. 547 crores, Vijayawada Thermal Power Station Stage IV with a capacity of 660 MW at an estimated cost of Rs. 2,706 crores, Bhoopalapally Thermal Power Station with a capacity of 500 MW at an estimated cost of Rs. 2,128 crores.

54. The total Budget allocation for the year 2004-05 for Power sector is estimated to be Rs. 2,300.89 crores against Rs. 2,096.55 crores budgeted last year.
 
Women Empowerment
 
55. Our Government is endeavouring to bring every woman belonging to poorer sections of the Society into the fold of Self Help Groups. Already there are 4.75 lakh Self Help Groups covering 65.39 lakh of rural poor women in the State. Government proposes to strengthen the economic base of these groups by making adequate provision of State Revolving Fund and ensuring bank linkage with Self Help Groups to provide institutional credit at a rate of interest of 3% per annum and accordingly a suitable Budget provision is also made for the interest subsidy. DWCRA groups will be assisted for taking up Self-Employment projects through adequate training and market support for SHG products.

56. The total Budget allocation for the year 2004-05 for Women Empowerment is estimated to be Rs. 213.32 crores.
 
Rural Development and Poverty Alleviation
 
57. Hon'ble Members are aware that this Government is determined to strengthen the Panchayat Raj Institutions through proper devolution of administrative and financial powers. Janmabhoomi programme, which had earlier brought nodal officers system into existence, has weakened the efficacy of Panchayat Raj Institutions. Government are keen that activities at village and mandal levels are supervised by the Panchayat Raj Institutions. Government is also determined to implement the 73rd Constitutional amendment in its true letter and spirit.

58. Sampoorna Grameena Rozgar Yojana will be implemented as a single scheme during 2004-05 and it is indicated by Government of India that an amount of Rs. 234.87 crores in cash and 2,61,244 metric tonnes of food grains have been allocated to the State. State Government will provide 25% of matching share under cash component and it is proposed to generate 550.24 lakh man-days in rural areas. Under this scheme, 22.5% of annual allocation of Mandal Parishads and Zilla Parishads has to be earmarked for individual beneficiary schemes for Scheduled Castes and Scheduled Tribes living below poverty line. Based on the recommendations of the Second State Finance Commission, Government has agreed to devolve Rs. 200 Crores per annum to Panchayat Raj Institutions.

59. There are 19,19,400 beneficiaries benefitting from old age pension scheme in the State. The allocation for this purpose is Rs. 138.12 crores.

60. The total Budget allocation for the year 2004-05 for Rural Development & Poverty Alleviation is estimated to be Rs. 731.32 crores.
 
Urban Development
 
61. Consequent upon the decadal increase in the rate of urbanization, almost 27.7% of the State population resides in towns and cities putting severe strain on the already overstretched urban basic infrastructure and services such as water supply, sewerage, roads etc., thus impacting the quality of life of the citizens. A special fund of Rs. 300 Crores was raised through HUDCO for financing A.P. Urban Infrastructure Development Project and about 1250 urban infrastructure projects have been taken up in the State. Besides this, Government of India has also sanctioned Rs. 345 Crores under Pollution Abatement Project of River Musi under the National River Conservation Plan. In addition to this, construction of 2.12 lakh units under Individual Low Cost Sanitation (ILCS) programme is under way.

62. Urban poverty assumes great importance not only in creating various livelihood enhancing measures for urban poor, but also in creating necessary delivery mechanisms such as neighbourhood groups to ensure that the poor women through collective and cooperative action can make marked difference in improving their socio-economic status. The Andhra Pradesh Urban Services for Poor (APUSP) project has started the novel project of (Urban Programme for Advancement of Household Income) UPADHI with a view to train the unemployed youth in the slum areas in association with leading community based organizations and equip them with skills through short capsule courses so as to enable them to lead their lives with dignity.

63. DFID funded APUSP programme has started operations further in 10 towns in addition to already existing 32 towns with the objective of attacking urban poverty in all its facets. Taking forward the experience gained in this project, we are seriously engaged with World Bank to fund similar initiatives in all the 118 Urban Local Bodies of the State. Hyderabad Urban Development Authority (HUDA) has drawn up a very ambitious plan of launching the outer ring road in four phases, totaling to a length of 108 kms through its internal resources and borrowings. Our Government is actively collaborating with Government of India in the field of urban reforms through their Urban Reforms Initiative Fund with the ultimate objective of achieving truly self-reliant urban local bodies.

64. The total Budget allocation for the year 2004-05 for Urban Development is estimated to be Rs. 1,198.09 crores against Rs. 939.74 crores budgeted last year.
 
RURAL WATER SUPPLY
 
65. Government attaches top priority for providing safe drinking water to all the habitations in the State. Recognising that the traditional approach without fullest people's participation is leading to relapsing of fully covered habitations into partially covered habitations and not covered habitations, Government have decided to popularize participatory programmes like Swajaladhara amongst the people. With this approach, it is programmed to cover all the 35,000 partially covered habitations in the State with sustainable drinking water systems during the next five years. Efforts will be made to streamline the maintenance of drinking water systems in the villages by involving the Gram Panchayats.

66. The infant mortality rate of about 72 per every 1,000 live births in the State is considered to be intolerable. Recognising that sanitation and hygiene can reduce this by fifty percent, it is proposed to cover all the remaining house holds with sanitary latrines during the course of next five years.

67. The total Budget allocation for the year 2004-05 for Rural Water Supply is estimated to be Rs. 467.06 crores.
 
EDUCATION
 
68. As per 2001 census, the literacy rate in Andhra Pradesh is 61.11 percent as against national average of 65.2 percent. Therefore, the Government proposes to invest adequately in education so that the state can become one of the highest literacy states in the country in the next five years. As the Government recognises that poverty is keeping children away from schools, it has made adequate Budget provision for providing Mid-Day Meal Scheme to the children in the State. In addition, the Government has made sufficient provision for running 7,351 primary schools opened in School less habitations, construction of school buildings, additional class rooms, undertaking repairs and maintenance to existing buildings, construction of kitchen sheds, provision of drinking water, toilets, compound walls and sanitation measures. The Government is supporting supply of free text books and positioning of quality teachers at all schools. In addition, schools are being equipped with library and play grounds facilities. Necessary Budget support has been provided for education of religious and linguistic minorities and in bridging social and gender gaps in enrolment, retention and achievement of SC/ST/BC and girl children. In addition, the Government is working out an additional package of incentives to curtail school dropouts and attract new children to schools. Merit scholarships to economically and socially backward communities are also proposed. The Government has further made adequate provision for spread of literacy among adults and for sustaining their literacy skills, community-learning centers are being set up.

69. The total Budget allocation for the year 2004-05 for School Education is estimated to be Rs.4,092.58 crores against Rs. 3,846 crores budgeted last year.
 
PUBLIC DISTRIBUTION SYSTEM
 
70. An amount of Rs. 500 crores has been provided in the Budget 2004-05 towards subsidy for supply of rice to white cardholders, as against Rs. 420 crores during 2003-04.
 
HEALTH & FAMILY WELFARE
 
71. Our Government is conscious of the need for providing comprehensive and quality healthcare to the people of the State, especially to the poorer sections of the society. There are 12,522 sub-centers, 1,490 PHCs and 125 Civil Hospitals functioning in the primary health sector. We have 224 hospitals in the secondary sector and 34 medical and teaching institutions providing specialized care in the tertiary sector. The overall bed strength in all these institutions is over 35,154. Hon'ble Members are aware that this Government immediately after taking charge has stopped the collection of user charges in all Government hospitals for various medical and diagnostic services in order to make available health services to poorer sections of the society free of cost.

72. In our State, Family Welfare programme is being implemented through 1,490 PHCs and 12,522 Sub-Centres in rural areas and 82 Post Partum Units, 131 Urban Family Welfare Centres and 192 Urban Health centers for urban slums. The National Maternity Benefit Scheme (NMBS) and Aarogya Raksha scheme are two important programmes implemented by the department of Family Welfare.

73. I hope that the Hon'ble Members will join their hands in strengthening the efforts of the Government in containing the dreadful disease of AIDS, which is assuming alarming proportions in our State and this is a major cause of concern for all of us. Our Government would make concerted efforts to contain it in the State by adopting multisectoral and multipronged approach.

74. The total Budget allocation for the year 2004-05 for Health & Family Welfare is estimated to be Rs. 1,658.85 crores.
 
INFRASTRUCTURE
 
75. Government is attaching top priority for development of infrastructure in the State like Roads, Ports and Airports.

76. The Roads & Buildings Department maintains about 65,346 Kms of road network. This includes about 4,100 Kms of National Highways, 19,000 Kms of taken over rural roads from Zilla Parishads and 11,000 Kms of core network roads of high density. Rural roads have also been taken up for improvement under NABARD.

77. In the year 2004-05, 1,850 Kms of road network will be improved and 8 bridges will be constructed under NABARD. Under external assistance programme, 405 KMs of roads and one bridge will be constructed. 5,000 Kms of road network and 500 culverts will be renewed/reconstructed under State Road Maintenance. 500 Kms of road network and 4 bridges will be taken up under Central Road Fund (CRF). Under National Highways, 251 Kms of roads will be improved, and 111 bridges and culverts will be constructed. It is proposed to improve the balance 13,000 Kms of taken over rural roads with blacktop in the next five years. It is also proposed to improve the balance 4,286 Kms of core network roads in the next four years.

78. There are two intermediate and ten minor ports in the State. Kakinada Deep Water Port, Vodarevu Port, Krishnapatnam Port and Gangavaram Port will be developed during 2004-05.

79. GMR-MAHB consortium has been selected as the developer for development of International Airport at Shamshabad under joint venture with Airports Authority of India and Government of Andhra Pradesh. Special efforts will be made to complete this work expeditiously. Extension work of Begumpet Airport runway has been started by Airports Authority of India for the operation of Boeing-747 Flights and is likely to be completed by August 2004. Government of India has been developing Visakhapatnam Airport at a cost of Rs. 190 crores by constructing 10,000 feet length of new runway, terminal building, aero-bridges and ILS system.

80. Andhra Pradesh State Road Transport Corporation (APSRTC), which operates about 19,108 buses, has revenue of Rs. 2,984.54 crores in the year 2003-04. In the year 2004-05 it is estimated to operate 228.40 Crore Kms with projected revenue of Rs. 3,056.28 crores. APSRTC is launching a multi-pronged action to improve the overall performance by stricter enforcement of laws to curb illegal operations, to achieve internal efficiencies by reducing expenditure, to optimize fleet utilization and to introduce innovative methods to meet the unmet demand in the market. The overall marketing strategy will be worked out for this purpose.

81. APSRTC is providing various concessions for which the Government has made a provision of Rs. 100 crores for the year 2004-05 towards reimbursement of concessions.

82. The total Budget allocation for the year 2004-05 for Infrastructure is estimated to be Rs. 1,496.50 crores.
 
INDUSTRIES & HANDLOOMS
 
83. The Government attaches importance to small and medium industries, export oriented industries and large industries to create employment opportunities in the State. Food processing policy will be strengthened to develop value added agro industries so as to generate large-scale employment in rural areas and provide high returns to farmers. Biotechnology will also be encouraged by offering new incentives to entrepreneurs coming forward to set up R & D centers in biotechnology. Industries department will bring out policies to facilitate better access to credit by youth. Industries Rehabilitation Board will be constituted to review the present situation of industrial sickness and suggest measures to prevent further sickness and to increase employment generation.

84. Sugar Industry will be given thrust by introducing Micro Irrigation Scheme on massive scale to conserve the available water and increase the area under cultivation besides the productivity. During 2004-05, it is expected to crush 90 lakh metric tonnes of sugarcane at an average sugar recovery of 10.10%.

85. Hon'ble Members are aware that this Government is very deeply concerned on the plight of the weavers who are put to great sufferings due to lack of gainful employment. Government would encourage strategy to set up Apparel Export Parks and Textile Parks in different parts of the State. Action will also be initiated to start weavers' clusters and to provide gainful employment to weaving families by dovetailing central and state plans for infrastructure development, including housing. APCO will be strengthened for marketing handloom products both from cooperative and other sectors.

86. Government intends to support Exhibitions/Expos in all important commercial centers for marketing of handloom and textile products.

87. The total Budget allocation for the year 2004-05 for Industries & Handlooms is estimated to be Rs. 253.89 crores.
 
SOCIAL WELFARE
 
88. Our Government is committed to accord a very high priority for the welfare of Scheduled Castes, Scheduled Tribes and Backward Classes. Schemes such as pre-metric, post metric scholarships, stipends, supply of text books and economic support schemes will be given greater thrust and implemented with greater vigour. There are 2,313 Social Welfare hostels with a strength of 2,67,549 boarders run by Social Welfare Department. The A.P. Scheduled Castes Finance Corporation continues to play an important role in the economic development of the Scheduled Caste families who are poor and living below the poverty line.

89. The total Budget allocation for the year 2004-05 for Social Welfare is estimated to be Rs. 860.54 crores against Rs. 807.84 crores budgeted last year.
 
BACKWARD CLASSES WELFARE
 
90. Economic and social advancement of Backward Classes is a top priority of this Government. We are making concerted efforts for the welfare of the people belonging to Backward Classes through various schemes to provide education, training and self-employment avenues. For the year 2004-05, it is programmed to assist 50,000 Backward Classes families with a budgetary support of Rs. 43.14 crores under various economic support schemes.

91. The total Budget allocation for the year 2004-05 for Backward Classes Welfare is estimated to be Rs. 267.66 crores.
 
TRIBAL WELFARE
 
92. Tribal population in the state has been categorized into five groups, namely, Tribals living in 10 ITDA areas, in 17 small clusters, in 41 MADA pockets, 8 primitive tribal groups and dispersed tribal groups. Separate strategies of development are being followed for the comprehensive development of these groups. It is the endeavor of our Government to provide improved health care in tribal areas and also to improve the infrastructure in these areas.

93. The total Budget allocation for the year 2004-05 for Tribal Welfare is estimated to be Rs. 544.50 crores against Rs. 433.50 crores budgeted last year.
 
MINORITIES WELFARE
 
94. As per 2001 census, about 84 lakhs of minorities are living in the State. For the welfare of these minorities, Minorities Welfare Department was established in the year 1993. The priorities of our Government are to help destitute women by extending small direct loans through DOMWUA groups and to assist the unemployed youth by imparting required training to set up small self employment ventures. The Government would give priority for promotion of education among the minority children by extending pre-metric and post-metric scholarships and take steps for completion of the ongoing 2nd survey of Wakf properties and to protect the Wakf properties by evicting the illegal encroachments.

95. The total Budget allocation for the year 2004-05 for Minorities Welfare is estimated to be Rs. 39.03 crores.
 
HOUSING
 
96. Our Government has recognised the fact, that provision of shelter to the families belonging to weaker sections is very important and this subject is on the top most agenda of our Government. Weaker Sections Housing Programme is a self-help activity and based on the cost effective and eco-friendly technology propagated through Nirmithi Kendra network. It is proposed to construct 6 lakh houses under this programme during 2004-05.

97. The total Budget allocation for the year 2004-05 for Housing sector is estimated to be Rs. 775.81crores against Rs. 535.07 crores budgeted last year.
 
TOURISM
 
98. Our Government has identified Tourism as one of the major growth engines. Special efforts will be made to promote tourism projects in order to provide direct and indirect employment to the youth. District Tourism, Rural Tourism, Temple Tourism, Heritage Tourism and family oriented Tourism will be prioritized in this direction. Special emphasis will be given for District Tourism to create employment at local levels as well as to generate more revenues. Various community based tourism projects will also be taken up on priority basis like development of Kuchipudi and Pochampally Villages. Our Government is encouraging Artisans and Self Help groups in promoting handicrafts through Tourism Souvenirs.

99. The total Budget allocation for the year 2004-05 for Tourism is estimated to be Rs. 66.45 crores against Rs.49.19 crores budgeted last year.
 
YOUTH WELFARE & CULTURAL AFFAIRS
 
100. Our Government is committed to formulate and implement suitable youth welfare activities in the State based on the changing needs and aspirations of the youth. The youth empowerment programmes will be further strengthened to provide gainful and sustainable employment to the youth. More impetus will be given to sports activities making best use of the existing infrastructure.

101. The total Budget allocation for the year 2004-05 for Youth Welfare is estimated to be Rs. 70.38 crores.

102. I am glad to inform this august House that we have provided an additional Budget of Rs. 4 crores for payment of artist pension arrears of 22 months and also for the current year at Rs. 500/- per month for 2,534 indigent artists.

103. The total Budget allocation for the year 2004-05 for Cultural Affairs is estimated to be Rs. 9.79 crores against Rs. 4.61 crores budgeted last year.
 
LAW & ORDER
 

104. Our Government is well aware that peace and prosperity is to be maintained for rapid economic growth of the state. We are determined to curb lawless forces that are impediments to well-being of the people and development of the State. Hon'ble Members are aware that peace initiatives have already begun with People's War to resolve the issue of Naxalism.

105. The total Budget allocation for the year 2004-05 for Home Department is estimated to be Rs. 1,568.85 crores against Rs. 1,343.54 crores budgeted last year.

 
 
ACCOUNTS FOR 2002-03

106. The final accounts of 2002-03 reveal a revenue deficit of Rs. 3,053.97 crores. After taking into account the transactions on capital as well as public accounts, the year closed with a negative balance of Rs. 172.44 crores.
 
 
REVISED ESTIMATES 2003-04
 
107. Transactions as per the revised estimates of 2003-04 indicate a revenue deficit of Rs. 2,904.50 crores against the budgeted revenue deficit of Rs. 2,131.58 crores. The overall transactions of the year are estimated to result in a net surplus of Rs. 152.93 crores. After taking into account the opening cash balance of Rs. 172.44 crores, the year-end balance is estimated to be negative Rs. 19.51 crores.
 
BUDGET ESTIMATES 2004-05
 

108. During the financial year 2003-04 it was programmed for an expenditure of Rs. 35,934.62 crores under non-plan and Rs. 15,207.87 crores under plan. This will result in a revenue deficit of Rs. 1,970.50 crores, which would be 0.97 percent of GSDP. The fiscal deficit is estimated to be Rs. 7,569.99 crores, which would be 3.74 percent of GSDP. After taking into account the overall transactions of the year, we will have a net deficit of Rs. 30.40 crores. The financial year is expected to end with a negative balance of Rs. 49.91crores.

109. Sir, with these words, I now commend the Budget to the House for approval.

 
 
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